Canadian regulators question the report, and TransCanada defends safety record, as a key U.S. senator endorses approval for the controversial pipeline

By Elizabeth McGowan, InsideClimate News

Feb 18, 2011

Image: David Dodge, The Canadian Parks and Wilderness Society, Oilsandswatch.org

WASHINGTON—Environmental organizations are recommending that the U.S. State Department put a controversial and potentially dangerous Alberta-to-Texas oil pipeline on hold until safety issues are fully understood and addressed via government oversight.

Pipelines transporting oil sands crude raise the risk of spills and damage to waterways, aquifers, ecosystems and communities because they are carrying a highly corrosive and acidic blend of diluted bitumen and volatile natural gas liquid condensate, according to the report released this week.

And the researchers are standing by their conclusions about the dangers of pumping Canadian heavy crude across this country's mid-section, despite their research being challenged by an Alberta regulatory authority as being flawed and misleading.

"As Canada delivers a greater and greater percentage of our oil, their corrosive products will take a greater and greater toll on our pipelines," report co-author Susan Casey-Lefkowitz, director of NRDC's international program, told reporters in a Wednesday teleconference. "As we saw in the Kalamazoo River last summer, there is real danger if we continue to ignore this problem. We need new safety standards in the United States that ensure our protection from raw tar sands oil in our pipelines."

At issue is Keystone XL, a 1702-mile, $7 billion pipeline that Calgary-based TransCanada[6] wants to construct from tar sands mines in its home province of Alberta to oil refineries on the Gulf of Mexico. The State Department is in the midst of updating a draft environmental impact statement for the project.

Due to the international nature of Keystone XL, Secretary of State Hillary Clinton's team is tasked with granting a thumbs up or down to TransCanada's request for a presidential permit to build and operate infrastructure being designed to pump up to 900,000 barrels of heavy crude daily.

A decision on the multi-billion dollar proposal is expected in the second half of this year. The Canadian National Energy Board[7] approved its portion of the project in March 2010.

"Tar sands extraction in Canada destroys boreal forests and wetlands, causes high levels of greenhouse gas pollution, and leaves behind immense lakes of toxic waste," the report states. "Less well understood, however, is the increased risk and potential harm that can be caused by transporting the raw form of tar sands oil [bitumen] through pipelines to refineries."

TransCanada Defends Safety Record

A spokesman for TransCanada, which already operates two other oil pipelines in this nation's heartland, says safety is paramount and that Keystone XL will be monitored 24/7.

"We are building the newest pipeline in North America," TransCanada's Terry Cunha told SolveClimate News, adding that satellite technology sends data every five seconds from 16,000 data collection points to a monitoring center. "We have a world-class control center that has both global and local leak detection systems that allows us to promptly detect a leak of any size. Pumps and motors at any station can be remotely started and stopped."

Cunha pointed out that thousands of miles of pipeline crisscross North America and that they are the safest and most efficient way to move energy products.

More Imports, Higher Risk

The 16-page report describes diluted bitumen as a raw and thick form of tar sands oil that is significantly more acidic and corrosive than standard oil and requires increased heat and pressure to move through pipelines. Those attributes make it more difficult to clean up after a spill.

Plus, that different chemical composition — five to 10 times as much sulfur as conventional crude and more chloride salts — can weaken pipelines and make them susceptible to breaking during pressure spikes. As well, researchers found that refiners are discovering more quartz sand and other solid material in diluted bitumen that essentially sandblasts pipe interiors.

An analysis in the report points out that Alberta's pipeline system — which is newer and carries more oil sands — has experienced 16 times more safety incidences due to internal corrosion than the U.S. pipeline system.

Between 2000 and 2010, Casey-Lefkowitz said, U.S. imports of diluted bitumen have grown five-fold from 100,000 to 500,000 barrels per day. That number could balloon to 1.5 million barrels per day by 2019.

Keystone XL, Lakeland Under Report Microscope

The report analyzes potential elevated safety risks of two pipeline systems — TransCanada's existing Keystone pipeline and the proposed Keystone XL, as well as the Lakehead system operated by Canadian-based Enbridge Energy Partners[8].

Diluted bitumen is the primary product transported on Keystone, which runs from Alberta to Illinois and Oklahoma. Both conventional oil and tar sands oil are shipped via the Lakehead system that goes from the Canadian border to Minnesota, Wisconsin, Illinois, Indiana and Michigan.

If built, Keystone XL's six-state U.S. portion would stretch 1,375 miles through Montana, South Dakota, Kansas, Nebraska, Oklahoma and Texas. Leaks of diluted bitumen on that pipeline would threaten the Ogallala Aquifer, a massive underground water source in the Midwest and Great Plains that supports agriculture and provides drinking water for millions.

Michigan's Kalamazoo River is still fouled by the aftermath of a rupture along an Enbridge pipeline between Indiana and Ontario that dumped more than 800,000 gallons of oil last July. Submerged oil means an Environmental Protection Agency-enforced ban on wading, swimming and fishing along a 30-mile stretch of the river remains in place.

The report highlights how pipeline spills in the Upper Midwest threaten the Great Lakes, which account for one-fifth of the world's freshwater. It also describes the risks that pipe ruptures in the central U.S. pose to other iconic waterways and already-compromised landscapes that provide crucial habitat for birds, fish and other creatures.

Rivers on the list include the Missouri, Yellowstone, Mississippi, Platte, Red and Neches. Ecosystems on the list include the sand dunes of Indiana, sandills of Nebraska, prairies of Kansas, prairie potholes and shortgrass prairies of South Dakota, and migration routes of pronghorn antelope in Montana.

Canadians Dispute Wrong Version

A Canadian regulatory agency issued a lengthy news release[9] Wednesday claiming NRDC's analysis of pipeline data were flawed and resulted in misleading and incorrect conclusions.

However, NRDC countered the statement, saying that Alberta's Energy Resources Conservation Board[10] based its argument on an earlier and incomplete version of the report from December.

"We stand by the information provided in the report — which is well documented and reviewed," Casey-Lefkowitz and Anthony Swift, both of NRDC, wrote in a rebuttal[11] spelling out at length how they reached specific conclusions in the report.

For instance, "in comparing the Alberta and U.S. hazardous liquid system spill rates and incidence of internal corrosion, the report made every effort to make an 'apples to apples' comparison," they wrote.

"The report only considered spills greater than 26.3 gallons, which are large enough to be tracked by regulators in both the United States and Alberta. While other differences between these lines may contribute to the significant disparity of the Alberta system having 16 times the rate of spills due to internal corrosion as the U.S. system, this high rate certainly is a warning sign of diluted bitumen's potential risks to pipeline safety."

In a second news release[12] issued Wednesday, ERCB acknowledged that its initial statement was based on an earlier version of the report.

However, the release continued, "the NRDC's response to the ERCB news release this afternoon did nothing to correct the flaws in their report." ERCB maintains that Alberta pipelines transporting diluted bitumen have not had a higher failure rate than similar U.S. pipelines and that diluted bitumen is not more corrosive than conventional crude oil.

"The NRDC mention in their response that they would like to 'continue a dialogue' with the ERCB," the release concludes. "The ERCB would be pleased to engage in a dialogue to assist the NRDC in understanding the facts on Alberta's oil sands."

Safety Legislation in the Hopper

Casey-Lefkowitz told SolveClimate News that Senate legislation geared at enhancing pipeline safety is an "excellent first step" toward the type of government oversight that should be mandatory.

About 2.5 million miles of pipelines that transport oil, natural gas, and hazardous liquids crisscross the country, according to a news release circulated by Rockefeller, chair of the Commerce, Science, and Transportation Committee, and Lautenberg, chair of the committee's surface transportation subpanel. Close to 40 pipeline incidents each year since 2006 have resulted in fatalities or injuries, their research reveals.

All local and state government agencies and their contractors to notify "one-call" notification centers before digging

Time limits on accident and leak notification by pipeline operators to local and state government officials and emergency responders

Pipeline operators to make information and inspections available to the public on the PHMSA's Web site

Authorization for phased-in hiring of additional pipeline inspectors and pipeline safety support employees

"As far as reading the tea leaves on how fast Congress will work on pipeline safety, you can place your own bet on how long these things will take," NRDC spokesman Josh Mogerman said. "A lot depends on if the public will tolerate the slow pace of progress in Washington or demand serious changes now."

Lugar Endorses Pipeline

On the same day that NRDC challenged the safety of Keystone XL, Sen. Richard Lugar announced his support for the project.

"Boosting trade with Canada offers tremendous opportunity to improve our energy security, and I encourage the State Department to expeditiously approve the permit for the Keystone XL pipeline," the Indiana Republican told an audience[15] Wednesday at the Alliance to Save Energy's 2011 Great Energy Efficiency Day Conference[16] in Washington. "This pipeline is critical to American efforts to enhance the reliability of our oil supplies."

Democrats often cite Lugar, ranking member of the Senate Foreign Relations Committee, as a crucial energy ally because of his deep knowledge of world affairs.

The moderate Republican is now in the midst of crafting an overarching energy bill and has talked about the possibility of including a clean energy standard in his legislation.

"We are living in an age when every American motorist relies upon production decisions in the Middle East," Lugar said in his speech, adding that the country is vulnerable to oil supply disruptions from war, political instability, terrorism or embargo. "It is an age in which every barrel produced, every barrel replaced with an alternative, and every barrel saved by efficiency has outsized importance."